Find the amount of Rs. 8000 for 2 years compounded annually and the rates being 9% per annum during the first year and 10% per annum during the second year.
Present value = Rs.8000
Interest rate for 1st year, p = 9 % per annum
Interest rate for 2nd year, q = 10 % per annum
Time = 2 years
Amount (A) = P × (1 + p/100) × (1 + q/100)
A = 8000 × (1 + 9/100) × (1 + 10/100)
= 8000 × (109/100) × (1 + 1/10)
= 8000 × 109/100 × 11/10
= 8 × 109 × 11
= 9592
∴ Amount = Rs.11253